1983 (4) TMI 275 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the goods as P.P. Caps under Item No. 42-CET.
2. Whether the Department is estopped from raising and enforcing demands for duty from the appellants for past periods.
3. Whether the demand for duty is time-barred.

Issue-wise Detailed Analysis:

1. Classification of the Goods as P.P. Caps:
The appellants contended that the goods in question were tab seals used for drums and not pilferproof caps (P.P. Caps). They argued that for a cap to be classified as a P.P. Cap, it required a flange, a plug, and a seal, which their products did not possess. The appellants also referred to the Indian Standards Institution (IS-1394: 1973) definition of P.P. Caps as "Screwed on closure with integral pilferproof arrangements," asserting that their products did not have threads or integral pilferproof arrangements. However, the Tribunal found that the cap seals acted as a check or barrier against ready and easy access to the contents of the container, fulfilling the function of a pilferproof cap. The Tribunal noted that Item No. 42-CET does not contain a definition of "pilferproof cap," and thus, the term should be given its plain meaning. The Tribunal concluded that the goods produced by the appellants were indeed P.P. Caps within the meaning of Item No. 42-CET.

2. Estoppel from Raising and Enforcing Demands for Duty:
The appellants argued that the Department should be estopped from raising demands for past periods because other manufacturers of similar goods were not paying duty. They cited the case of M/s. Trisure India Ltd., where similar goods were declared non-excisable. However, the Tribunal found that the appellants failed to provide corroborative evidence to support their claim of discrimination. The Collector had examined the cases of other manufacturers and found that their products were either not classified under Item 42-CET or were different from the appellants' products. The Tribunal held that the appellants had not satisfactorily discharged the onus of proving discrimination and thus, the Department was not estopped from raising demands.

3. Time-barred Demand for Duty:
The appellants contended that the demand for duty was time-barred, referring to the Show Cause Notice dated 6-10-1977, which covered the period from 6-2-1969 to 16-4-1977. The Tribunal noted that the Department had made its stand on the excisability of the product clear to the appellants as early as 1974. Despite this, the appellants continued to clear the goods without payment of duty. The Tribunal found that the appellants had been aware of the Department's position and should have either paid duty under protest or appealed the decision. Since the appellants did neither, the question of time-bar did not arise. The Tribunal also noted that at the relevant time, there was no time-limit for raising demands for duty on goods cleared without observance of Central Excise formalities. Therefore, the Tribunal concluded that the demand was not time-barred.

Conclusion:
The Tribunal held that the goods produced by the appellants were P.P. Caps within the meaning of Item No. 42-CET. The Department was not estopped from raising and enforcing demands for duty for past periods, and the demand for duty was not time-barred. Consequently, the appeal was rejected.